Ovintiv (OVV) AI Stock Analysis

Compare

1,750 Followers

OVV Dividends

Top Page

Ovintiv

(NYSE:OVV)

62Neutral

Ovintiv's overall score of 62 reflects mixed financial performance with declining revenues but improved cost management. The stock faces bearish technical indicators but is attractively valued. Positive earnings call guidance and strategic asset management support potential future growth amidst current challenges.

Positive Factors

Debt Reduction

Management expects to generate enough free cash flow to significantly reduce debt, with plans to restart share buybacks in the near future.

Financial Performance

Ovintiv Inc. has an attractive Free Cash Flow and Return on Capital profile, which investors view favorably.

Operational Efficiency

Ovintiv Inc. has improved drilling and completion rates by 18-20%, resulting in lower costs in the Midland basin.

Negative Factors

Asset Impairment

OVV expects a non-cash impairment related to its Canadian assets, impacting financial results.

Oil Volume Impact

First quarter oil volumes are expected to be modestly below expectations due to deal timing and winter weather impacts.

Production Decline

A decline in Anadarko production is expected due to the lack of activity in the second half of the previous year.

Ovintiv (OVV) vs. S&P 500 (SPY)

Market Cap

$8.95B

Dividend Yield3.57%

Average Volume (3M)4.34M

Price to Earnings (P/E)8.2

Beta (1Y)0.98

Revenue Growth-15.82%

EPS Growth-46.85%

CountryUS

Employees1,623

SectorEnergy

Sector Strength47

IndustryOil & Gas Exploration & Production

Share Statistics

EPS (TTM)4.20

Shares Outstanding260,324,460

10 Day Avg. Volume2,710,528

30 Day Avg. Volume4,343,235

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.88

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit3.37

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$52.12

Price Target Upside51.60% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering17

Ovintiv Business Overview & Revenue Model

Company DescriptionOvintiv Inc. (OVV) is a prominent energy producer that operates primarily in the oil and natural gas sector. The company is engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids (NGLs) across its extensive asset base in North America. Ovintiv focuses on optimizing its portfolio through a combination of technological innovation, operational efficiency, and strategic resource management to deliver energy solutions that meet market demands.

How the Company Makes MoneyOvintiv makes money through the exploration, extraction, and sale of oil, natural gas, and NGLs. The company's revenue comes from the production and sale of these commodities, which are extracted from its significant holdings in resource-rich areas such as the Permian Basin, Montney, and Anadarko Basin. Ovintiv's revenue streams are influenced by global commodity prices, production volumes, and the successful implementation of cost-effective extraction and production techniques. Additionally, Ovintiv benefits from strategic partnerships and joint ventures that enhance its operational capabilities and market reach, thereby contributing to its overall earnings.

Ovintiv Financial Statement Overview

Summary

Ovintiv demonstrates improved cost management with a higher gross profit margin, but declining revenue and net income impact overall financial health. The balance sheet indicates reduced debt, yet lower profitability is a concern. Lack of 2024 cash flow data adds uncertainty, but previous trends suggest cash management needs improvement.

Income Statement

Positive

Ovintiv shows a decline in total revenue over the past year, with a decrease from $10.66B in 2023 to $9.15B in 2024. The gross profit margin increased significantly from 46.58% in 2023 to 89.81% in 2024, indicating improved cost management. However, net income dropped, leading to a decrease in net profit margin from 19.56% in 2023 to 12.29% in 2024. EBIT and EBITDA margins also decreased, suggesting pressure on operational efficiency.

Balance Sheet

Positive

The debt-to-equity ratio improved from 0.64 in 2023 to a much more favorable position in 2024, as the company reduced its debt to zero. Return on equity decreased from 20.10% in 2023 to 10.89% in 2024, reflecting lower profitability. The equity ratio was 51.89% in 2023, indicating a stable equity position but was not calculable for 2024 due to missing asset data.

Cash Flow

Neutral

Cash flow data for 2024 is missing, making it challenging to fully evaluate current performance. In 2023, Ovintiv had a free cash flow of $1.42B, down from $2.03B in 2022, indicating a decline in cash available after capital expenditures. The free cash flow to net income ratio was 0.68 in 2023, showing a moderate conversion of income to free cash flow.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
9.15B	10.66B	12.46B	8.66B	6.09B
	Gross Profit
4.98B	4.96B	7.30B	4.22B	2.71B
	EBIT
1.58B	2.86B	3.85B	1.52B	609.00M
	EBITDA
4.05B	4.71B	5.00B	2.79B	-3.50B
	Net Income Common Stockholders
1.13B	2.08B	3.64B	1.42B	-6.10B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
42.00M	3.00M	5.00M	195.00M	10.00M
	Total Assets
19.25B	19.99B	15.06B	14.05B	14.47B
	Total Debt
6.29B	6.68B	4.49B	5.78B	8.01B
	Net Debt
6.25B	6.68B	4.49B	5.58B	8.00B
	Total Liabilities
8.92B	9.62B	7.37B	8.98B	10.63B
	Stockholders Equity
10.33B	10.37B	7.69B	5.07B	3.84B
Cash Flow		Free Cash Flow
1.42B	1.42B	2.04B	1.61B	159.00M
	Operating Cash Flow
3.72B	4.17B	3.87B	3.13B	1.90B
	Investing Cash Flow
-2.46B	-5.52B	-1.79B	-525.00M	-1.86B
	Financing Cash Flow
-1.23B	1.36B	-2.27B	-2.42B	-206.00M

Ovintiv Technical Analysis

Technical Analysis Sentiment

Negative

Last Price34.38

Price Trends

50DMA

38.54

Negative

100DMA

40.26

Negative

200DMA

40.98

Negative

Market Momentum

MACD

-1.41

Negative

RSI

42.10

Neutral

STOCH

72.27

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OVV, the sentiment is Negative. The current price of 34.38 is above the 20-day moving average (MA) of 34.21, below the 50-day MA of 38.54, and below the 200-day MA of 40.98, indicating a bearish trend. The MACD of -1.41 indicates Negative momentum. The RSI at 42.10 is Neutral, neither overbought nor oversold. The STOCH value of 72.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OVV.

Ovintiv Peers Comparison

Overall Rating

UnderperformOutperform

Sector (56)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PR	77 Outperform	$9.79B	8.37	12.79%	3.56%	60.23%	19.57%
PAA	75 Outperform	$11.76B	22.82	7.56%	7.63%	3.28%	-47.59%
MUR	73 Outperform	$2.98B	7.74	7.77%	5.77%	-12.48%	-36.47%
NFG	70 Outperform	$7.02B	82.82	-0.36%	2.68%	-10.64%	-102.62%
AR	65 Neutral	$10.30B	183.38	0.82%	―	-4.22%	-77.20%
OVV	62 Neutral	$8.95B	8.17	10.87%	3.57%	-15.82%	-46.85%
Sector *	56 Neutral	$6.92B	3.31	-4.49%	6.03%	-0.35%	-47.83%

* Energy Sector Average

Performance Comparison

OVV

Ovintiv

34.38

-15.67

-31.31%

MUR

Murphy Oil

21.11

-21.49

-50.45%

NFG

National Fuel Gas Company

79.20

26.11

49.18%

PAA

Plains All American

16.71

0.15

0.91%

Antero Resources

34.65

1.51

4.56%

Permian Resources

12.10

-4.04

-25.03%

Ovintiv Earnings Call Summary

Earnings Call Date:Feb 26, 2025

(Q4-2024)

% Change Since: -17.32%|

Next Earnings Date:May 06, 2025

Earnings Call Sentiment Positive

The earnings call reflected strong financial and operational performance with significant free cash flow generation, shareholder returns, and successful debt reduction. Strategic acquisitions and operational efficiency gains were highlighted as key achievements. However, there were minor challenges related to natural gas and NGL volumes and expected higher Canadian royalties.

Q4-2024 Updates

Positive Updates

Record Free Cash Flow and Shareholder Returns

Generated free cash flow of approximately $1.7 billion, up 50% year over year, with more than $900 million returned to shareholders.

Strong Operational Performance in Key Assets

Delivered oil and condensate volumes averaging 210,000 barrels per day, beating guidance, driven by strong results in the Permian and Montney.

Debt Reduction Achievements

Reduced net debt by more than $320 million, ending the year with $5.4 billion of net debt.

Enhanced Capital Efficiency

Achieved significant efficiency gains, including industry-leading drilling and completion speeds and reduced well costs across key assets.

Strategic Acquisitions and Divestitures

Acquired assets in the Alberta Montney and divested Uinta assets, adding 900 high-quality drilling locations and enhancing free cash generation.

Negative Updates

Challenges in Natural Gas and NGLs

Natural gas and NGL volumes came in slightly below guidance due to a value-based decision to reject ethane in the Anadarko and temporary weather impacts.

Higher Canadian Royalties Expected

Projected to experience higher Canadian royalties due to increased gas prices, which may modestly affect volumes.

Company Guidance

During the conference call, Ovintiv provided comprehensive guidance for 2025, projecting a robust financial performance. The company expects to generate over $2.1 billion in free cash flow, assuming commodity prices of $70 WTI and $4 NYMEX gas, marking an increase of more than $300 million from the previous year. They plan to maintain oil and condensate production at approximately 205,000 barrels per day, with total production volumes between 595,000 and 615,000 BOE per day, supported by a capital investment of about $2.2 billion. Ovintiv also highlighted significant efficiency improvements, citing a reduction in drilling and completion costs and enhanced productivity per lateral foot across their assets. They are strategically leveraging their diversified portfolio, focusing on high-return oil and condensate-rich areas, while also positioning themselves to benefit from potential increases in gas prices. With ongoing efforts to reduce net debt to below $5 billion by year-end, Ovintiv is poised to continue delivering strong shareholder returns and optimizing their capital structure.

Ovintiv Corporate Events

Executive/Board ChangesShareholder Meetings

Ovintiv Announces Board Member Departure in 2025

Neutral

Feb 25, 2025

On February 19, 2025, Suzanne P. Nimocks informed Ovintiv Inc. that she will not seek re-election to the Board of Directors at the 2025 Annual Meeting of Shareholders. Her decision was not due to any disagreements with the company’s operations or policies. The Board plans to reduce the number of directors to eleven following her departure, and the company expressed gratitude for her service.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.